36 Pages Posted: 16 Aug 2001
Date Written: 2001
We use laboratory experiments to explore merger failure due to conflicting organizational cultures. We introduce a laboratory paradigm for studying organizational culture that captures several key elements of the phenomenon. In our experiments, we allow subjects in "firms" to develop a culture and then merge two firms. As expected, performance decreases following the merging of two laboratory firms. In addition, subjects over-estimate the performance of the merged firm and attribute the decrease in performance to other subjects rather than to situational difficulties created by conflicting culture.
Suggested Citation: Suggested Citation
Camerer, Colin and Weber, Roberto A., Cultural Conflict and Merger Failure: An Experimental Approach (2001). USC CLEO Research Paper No. C01-10. Available at SSRN: https://ssrn.com/abstract=276288 or http://dx.doi.org/10.2139/ssrn.276288